Lundin Mining makes unsolicited offer for Nevsun Resources

Following the news release issued by Lundin Mining stating that it may make a formal offer toacquire dual-listed Nevsun Resources, the company has advised its shareholders that no formal offer has yet been made, and recommends that shareholders 'take no action' in response to Lundin's announcement.

"This latest announcement from Lundin continues to ignore the fundamental value of Nevsun and its assets,” says Nevsun Resources president and CEO Peter Kukielski.

“Despite the progress we have made in enhancing Nevsun's value, Lundin's notional takeover offer represents only a 13% premium to Nevsun's closing trading price of C$4.21 per share on the TSX on 16 July 2018, and only a 9.1% premium to the volume weighted average trading price of Nevsun's shares over the 30 days ended July 16, 2018,” says Kukielski.

Since Lundin first expressed interest in Nevsun, the company has released a pre-feasibility study (PFS) for the Timok Upper Zone with an after-tax NAV of US$1.82 billion, received a critical exploration decline construction permit in February, began construction in May, and in June released an initial inferred resource for the Timok Lower Zone containing 31.5 billion pounds of copper and 9.6 Moz of gold.

At the same time Nevsun has extended the mine life at Bisha through 2022, adding 3.3 Mt of high-grade ore to the mill, resulting in additional payable production of 470 million pounds of zinc and 52 million pounds of copper over this time frame.

“The work that Nevsun has been doing has also been noticed by several strategic parties that have expressed an interest in participating in the development of Timok, says Kukielski.

Nevsun confirms that it has not received any additional information on the proposed offer by Lundin other than what was publicly disclosed in its press release issued on 16 July.

The last Lundin expression of interest dated 3 July 2018re-affirmed its interest in pursuing a transaction at C$5.00 per Nevsun share, funded in cash and Lundin shares. Today's publicly announced intent to make an offer is C$0.25 per Nevsun share (or 5%) below this latest formal communication.

Nevsun says that should a formal offer be received, the special committee of independent Nevsun directors would consider it with its advisors before making a recommendation to Nevsun's board of directors and Nevsun's shareholders. If Lundin makes a formal offer on 27 July 2018, as it indicated in its news release, Nevsun shareholders would have a minimum of 105 days, or until 9 November 2018, to respond.

Nevsun Resources reminds shareholders that Lundin has previously made highly conditional confidential non-binding offers to Nevsun but has never presented a binding offer to Nevsun or its shareholders. In spite of this, the company has, in good faith, openly and continually engaged with Lundin.

Consistent with its fiduciary duties, Nevsun's board of directors remains open to any transaction that is in the best interest of the company.